Covid-19: 10 trends informing our Big Reset

Written by Tatjana von Bormann, 21 May 2020

Even before the onset of the Covid-19 pandemic we were already aware that the economy was on a worrying trajectory, further locking us into increasingly damaging environmental practices and widening the divide between the few and privileged rich and the many poor.

Now the virus has thrown a harsh light over the deadly implications of inequality, the unmanageable impacts of both the health crisis and the economic impacts landing heavily on the poor and disenfranchised across the country. It’s forced us to stop theorising about what an equitable economic transition would look like and to start working actively to recreate a stronger world coming out of this.

This shift is overdue and small changes won’t cut it. Righting our world is going to take a radical reset of business operational logic, provisioning systems, civil society capacity and involvement, and governance, at multiple levels from local to national and international.

1. From recession to depression

Many countries were teetering on the brink of a recession or were there already before the global lockdown, South Africa included. In April the International Monetary Fund declared the world to be in the worst economic downturn since the Great Depression. This massive destruction of wealth will result in a slowing of the recovery and possibly different priorities for those who still have discretionary wealth. How this impacts bilateral aid and philanthropic priorities remains unclear but the fallout is likely to be profound.

2. Escalating risks to multilateralism

Prior to the outbreak of the coronavirus there was already evidence of a rise in nationalistic populism and a decline in support for multilateral institutions and commitments. Now, even as flattening the curve requires everyone to work together, there remains evidence of increasing isolationism in certain parts of the world, withdrawing support not just for United Nations Framework Convention on Climate Change (UNFCCC) but also the World Health Organisation (WHO). This is a worrying trend, given that it is abundantly clear that a multilateral response is needed to strengthen community and state capacity and resilience to future global shocks.

A decline in support for multilateral institutions is a worrying trend.

3. Deepening policy uncertainty

Policy uncertainty in global policy frameworks and in a local context as a result of political and economic uncertainty has been a clear feature of this health crisis. In South Africa, the way in which the State of Disaster has played out has been exacerbated by poor translation and uneven implementation at the local level. Right now there seems little hope of a reversal of this trend.

4. Shifts towards pro-poor investments

Economic depression and the evidence of a pervasive failure to protect the poor will result in a shift in funding to support the vulnerable, but possibly also towards building greater, crisis-oriented capacity, and government institutions. Some are hopeful that this might also see the advent of a universal basic income. This will have multiple benefits including buffering those in the service industries who are also at risk of job losses due to increasing automation and digitisation, which will only accelerate with social distancing practices.

5. Ever greater concentration of power

Across provisioning systems there has been a steady trend towards market concentration in the hands of a few corporates, particularly multinationals. This has had a direct impact on consumer choices, vulnerable informal markets, and made it very difficult for small and medium enterprises (SMEs) to survive. This trend has likely continued to strengthen in the lockdown, buttressed by essential service clearance and ecommerce. The failure to recognise the critical role played by the informal sector as essential services in the current lockdown scenario wrought further havoc on a tenuous existence for many businesses and individuals.

The coronavirus pandemic has forced us to rethink everything we've taken for granted to date.

6. A rise in grassroots power

People power, rising social consciousness and growth in grassroots movements has all come about as a result of civil society moving rapidly to organise and reach out to those in need, mobilising around immediate relief efforts. There is a new social awareness coming out of Covid-19, as is often the case in a crisis.

7. Leapfrogging technological innovation

The ability to host virtual meetings, adopt secure online document signing protocols and conduct online schooling have been fundamental for social distancing measures. However, this is not just about celebrating innovation. The uptake of surveillance technology is eroding the rights of individuals. Equity and fairness are further compromised as without technology transfer the uptake in new ways of working, schooling and technology will only further exclude the poor and marginalised.

8. Rethinking intensification of agricultural and livestock production

The past 50 years have been characterised by rapid intensification of industrialised agriculture and concentrated livestock production to meet the ever growing demand. This in turn has driven climate change and biodiversity loss and now scientific evidence indicates that changing land use, primarily for agriculture, was a direct driver of the Covid-19 zoonotic pathogen pathway.

9. A seismic shift in the climate change debate

We’ve already been scared by the Day Zero drought and we know that it’s by no means a threat that’s gone away. Climate disruption is ongoing and we will continue, in growing numbers, to be dependent on finite natural resources. But even so we have struggled to make the necessary lifestyle changes. Now, in a very real way, it’s possible that we may shift the trajectory of climate change. It is possible that the slowdown in economic growth and reduced oil demand may accelerate alternative, greener technologies. It’s possible that the massive destruction of wealth will mean that we have seen peak emissions and demand will plateau. Of course the alternative remains possible too – that the massive drop in the oil price will lead to rapidly ramping up consumption. Where we go from here is unpredictable but, if in an effort to kickstart the ailing economy, we rapidly return to business as usual we will have missed a generational opportunity to rebuild to a more sustainable and inclusive economy. Already there is a growing body of evidence to support the potential benefits of sustainable stimulus packages, with strong alignment between the economy and the environment, over traditional economic recovery packages.

10. Imagining a different future

Sudden and dramatic lifestyle changes, changes in the way we view the market and value exchange, changes in the way we work and socialise, a massive and coordinated shutdown of the global economy within a month – these changes and countless others make it possible to imagine a different future. Indeed it’s given us permission to think differently on a historic scale. Right now the desire to get back to normal is overwhelming but by the same token we are recognising that what we once regarded as normal may not be ideal. To revert to where we were before, without reflecting on the context of where we are now and charting a course for where we want to go, taking everyone with us, would be a mistake. Nobody would have wished for this disruption but now that it has happened, we cannot waste the opportunities it has presented us with.

Tatjana von Bormann, Policy and Futures Unit, Acting Head

Tatjana manages a multidisciplinary team focused on some of the key challenges at the intersection of society and the environment, among them energy provision, food security and sustainable urban settlements.